Inter-Alpha Mobilizes for EMF Dictatorship, Now!

At the center of ongoing discussion about the creation of a European Monetary Fund (EMF) is a draft worked out already one year ago by Deutsche Bank's Thomas Mayer and Daniel Gros from the Center for European Policy Studies in Brussels. The draft was sent to "competent people" a few weeks ago, says Gros in an interview with the Italian daily Il Messaggero today. The EMF shall have more powers than the IMF, namely to put non-complying countries in receivership.

Gros is not just any old fascist bureaucrat. He is the President of San Paolo IMI Asset Management—and Intesa-San Paolo IMI of Italy is one of the 11 member banks of the Inter-Alpha group. Another of the 11 is Germany's Commerzbank, whose chief economist last weekend demanded that sanctions be immediately applied to Greece, that there is no time to waste, and that the necessary dictatorial mechanisms should be put in place, now.

Inter-Alpha's Gros explains the EMF proposal as follows:

If a country "receives a loan and does not implement the requested budget corrections," in that case "we propose that the European Fund not only suspend aid to the troubled country, but that it also buy its sovereign debt at a discount, so that depositors and banks not lose too much and the collapse is prevented. At that point, however, the EMF becomes the sole owner of the country's debt, with a deciding voice on economic choices. The news is exactly in such a possibility to have a sort of controlled bankruptcy, which is a disciplinary mechanism stronger than what the IMF has."

The EMF must be created quickly, in view of the next deadlines of Greek debt sales. "If Germany, the only one which has money, gives the green light, it will be quickly created." Well, according to leaks in the media, experts at Germany's Finance Ministry are pursuing a modification of the Mayer-Gros draft, namely to add an "insolvency mechanism" to the future EMF, which would allow a troubled EU member nation, such as Greece is now, to file for sovereign default and thereby become "eligible" for EMF bridging loans under harsh conditionalities.